June Top 100 HECM Lenders Report

June 2019 top reverse mortgage lenders

 

 

 

Download the full report  [pdf]



We expect to see now-exited Live Well Financial’s loans in the report for the next 3-4 months as their pending pipeline of loans are insured. May endorsements are down 8% month-to-month but volume is only down modestly when considering the second half of FY 2018. We have the same top-ten lenders in May as in April with some minor ranking changes. YTD endorsements are down 39% from May 2018.

This report was compiled from data courtesy of Reverse Market Insight.
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4 comments

James E. Veale, CPA, MBT July 2, 2019 at 3:07 pm

HUD reported on Saturday night that there were only 2,546 HECM endorsements for the month of June

HUD also reported that the endorsements for the first nine months of fiscal 2019 totaled just 23,759 endorsements. That is the lowest such total in 16 years which was the total for the first nine months of fiscal 2003. The second lowest total for the first nine months of any fiscal year in this decade was fiscal 2016 with 37,206 which is 57% higher than for the first nine month total in fiscal 2019.

2,546 endorsements is the lowest total for any month this fiscal year other than December 2018 and January 2019 both of which were months in which the partial federal government shutdown was taking place. June’s endorsement total was 5.6% lower than the total for May 2019 and 10.9% lower than the total for June 2018. It is the lowest total for any June since June 2003.

As of today, it appears that the total for this fiscal year will only be about 32,500 HECM endorsements. That would be the lowest fiscal year total for any fiscal year since fiscal 2002. The percentage loss for fiscal 2019 when comparing its total endorsements to the total endorsements for fiscal 2018 would be 32.8% which is unprecedented when comparing the endorsements for one fiscal year to the endorsements for the fiscal year that immediately precedes it.

Based on the Case Number Assignments for the three consecutive calendar months ended May 31, 2019 plus the recent conversion rates, it appears that other than total endorsements for December 2018 and January 2019 (again, the months during which the government shutdown took place), June 2019 endorsements will have the lowest endorsement total for any month during fiscal 2019. Of course this is all depends on HUD being able to process endorsements in the same manner and at the same rate in the final three months of fiscal 2019 as it did in the final three months of last fiscal year.

The endorsement total for June 2019 is one of the major disappointments so far of this fiscal year.

To understand how really bad the numbers are for this fiscal year, realize that the loss in endorsements that occurred in fiscal 2010 (over 35,500) is GREATER than the total number of HECMs that are projected to be endorsed in fiscal 2019. The percentage loss in endorsements in fiscal 2010 was only 31% compared to the 32.5% being projected right now for fiscal 2019.

Rather than trying to find optimism in the midst of this real gloom, the industry should be finding real and lasting answers to both low endorsement production and MMIF losses.

Reply
Robin D. Faison July 5, 2019 at 6:31 am

Oh well. Glad I am out of the business. I saw the writing on the wall back in 2016. The recent changes to pricing/commissions/yield spread, doomed the product. all the progress made with the other financial professionals was lost with the costs (not being covered by originator)of doing the loan. People are not stupid. And the seasoned reverse mortgage originators cannot make a living. Newbies will have a hard time selling the loan with the costs not being covered. HUD does not care. I do not see any “renaissance”. I keep following the reports. Although, I almost forgot to look it up this month. Good to hear from Mr. Veale. They will need to bring back the “hay”, so to speak, to cover costs and increase principal limits. That is the “real” fix to the failing industry.

Reply
Stephen Caruso July 9, 2019 at 9:05 am

the only bright spot lately is the interest rates are lower than 6 months ago so one of my clients just got an extra $5k on her modest loan which thrilled her to no end. some of my short to close clients are now qualifying…

Reply
The_Critic July 10, 2019 at 7:25 pm

Stephen,

I guess what you are saying is that home values are holding in the localities where your on the fence prospects (at least proceeds wise) are sitting on the fence or the home was worth about $726,000 now as well as six months ago. Can you address home value at closing as well as 6 months earlier as well. Please note we have reading about home values nationally, may be you can speak to it in one locality.

Thanks,

The Critic

Reply

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